Egypt signs first settlement in new export subsidy framework
Exporter sees first settlement under long-anticipated export subsidy program: The finance and trade ministries have signed a settlement agreement with Sumitomo Tires that will see the company receive overdue subsidies in less than five years as part of the government’s new export subsidy framework, the Finance Ministry said in a statement. The company is planning to begin building a new EUR 10 mn factory in Port Said this month, which it expects to complete within six months, Managing Director Richard Nelson said. The factory will start production by mid-2020, he added.
Background: The government kicked off last week a new export subsidy framework designed to promote exports as a main driver of economic growth. Under the program, around 1,000 small companies and exporters are set to receive their dues “immediately,” while larger corporations will be encouraged to commit to new investments to speed up their payments. The Egyptian Businessmen’s Association estimated last year that the government could owe exporters EGP 9 bn. Others in the field have put the figure even higher.